tv Rep. Chris Collins Indictment News Conference CSPAN August 13, 2018 4:17am-4:44am EDT
to vote. all of this within one month of the supreme court gutting the voting rights act. watch on c-span, c-span.org, and listen on the free guest: radio app -- c-span radio app. the news conference with federal authorities commission witha news conference representative chris collins on insider trading. eff: good afternoon. i am just burning some of the u.s. attorney for the southern district of new york. today, we announce criminal charges against christopher charges, a united states congressman. lyings is charged with to the fbi at insider trading.
ongressman collins cheated market and justices in two ways. tost, he tipped his son confidential corporate information at the expense of regulatory ambassadors, and he lied to law enforcement to cover it up. also charged or his son, cameron and stevens starsky, the father of cameron's the fiancée. now i would like to go into the details of the allegations a little more. in addition to serving in the representatives,
collins on the border of in immunotherapeutic, a company creating a drug for multiple sclerosis. confidentialold and highly sensitive information about innate, information that was not yet made public. namely that innate's main drug, the drug innate was developing to be the backbone of this company, was total failure. this was devastating information for the company. congressman collins had an obligation, a legal duty, to keep that information secret until that information was released by the company to the public, but he did not keep it secret. instead, as alleged, he decided to commit a crime. friendsd family and
above the public good. congressman collins was a major investor in innate, and so was his son, cameron. sellongressman and the not its own shares for personal and technical reasons, including that he was already under investigation regarding innate by the congressional ethics office. the crime that he committed was to protect his son cameron so that cameron, and as you select others -- and a few select others, could trade on the news while investors remained in the dark. as alleged, that is exactly what they did. his son, cameron, sold. his fiancée sold. the father of his fiancée sold.
starkey's wife sold. because of the congressman's nate'so keep in information secret. the stock plummeted. conspirators used inside information to avoid several thousand dollars in lawsuits, but congressman collins cannot keep this crime a secret forever. the fbi asked to interview him, and instead of telling the truth, cameron collins, did stephen zarsky. crime ofged in a criminal cover-up.
i would like to go over the charge with some of the allegations in the indictment. the first chart is a tipping chain to demonstrate the flow of the illegal insider information and the trading, illegal trading of that information. at the top of the chain is congressman collins. he had applications as innate board member when he chose to train corporate information to secret toinformation the company and announced to the public. in total disregard of the obligations of minutes after congressman collins received the devastating, highly confidential e's drugt innat therapy drug trial, congressman informationed that
to his son, so that his son could sell. that illegal inside information, he did two things, both of which are illegal. he sold stock based on that inside information and avoided $570,000 in losses. he also took that illegal insider information and tipped others. he tipped his fiance, his fiancee's father and a friend. on thathom traded illegal inside information. avoidedcee's father $143,000 in losses by trading on that information and he tipped others. he tipped his brother, his
sister and a friend. two of whom traded on the information. one attempted to trade on the information but was unable. in total, the conspirators avoided losses of over $758,000 all because of the initial, illegal insider trading tip by congressman collins. chart, we set some of the key allegations in the indictment against a timeline, a backdrop of the share price. on the evening of june 22, 2017 congressman collins was at a congressional picnic. at: 55 he received in email from informing him of the veranda's news that the drug had failed its trial.
p.m.,en: 10:00 congressman collins was wanted to that email. , athe indictment alleges seven: 10:00 p.m., congressman collins was aware of the insider information. a minute later, congressman collins attempts to call his son. minutes,riod of five there are six unsuccessful calls . on the seventh call, as alleged in the indictment, congressman camerontips his son about the drug trial results, so that his son cameron could trade all those results. later that evening on june 22, after cameron collins has the
legal insider trading information, cameron collins drives with his fiancee to his hyeon says parents house. -- his fiancee's harris house. they arrived at 9:17 p.m., less than 20 minutes later, at 9:34 p.m., the fiance's mother is on the phone with her broker, beginning the process of selling her shares. 23, att morning on june 7:42 a.m., cameron collins begins the process of selling his shares. and june 26, cameron collins sells approximately 1.3 , prior to thees
market close of june 26. after the market closes, innate announces to the public that its drug had failed to trial. pricext day, the drug falls off. it drops 92% in value in a single day. this was the drop that was anticipated by the co-conspirators. this was the drop in value that the co-conspirators avoided by selling their shares for the public announcement. they could only sell those shares by virtue of the initial tip of inside information i congressman collins. -- by congressman collins. of case of this type .ignificance involves the fbi
their representatives are standing up here with me today. to my left is my good friend bill sweeney, the assistant director in charge of the fbi's new york field office. to the far left is john, the special agent in charge of the fbi new york office criminal division. the fbi's work on this case was a calculator. i want to thank them for their professionalism and dedication. we work with the fbi on so many cases and it is always a privilege. stephanie and steve are codirectors of the division of enforcement. and the fccank them for their hard work on this. i want to acknowledge and thank
the prosecutors in my office handling the case. , bob right is max nicholas then, scott hartman and co-chiefs of our securities and commodities fraud task force. collins, who by virtue of his office helps to write the laws of our nation, acted as if the law did not apply to him. the charges today demonstrate once again that no matter what the crime and no matter who committed it, we stand committed in the pursuit of justice without fear or favor. to invite toike the podium, bill sweeney.
bill: good afternoon everybody. christopher collins sat on a board of directors for a period of more than three years, spanning the run-up to the drug trial announcement in may 2017. collins himself was the largest shareholder. druge summer of 2017, a designed to treat multiple sclerosis had entered the late stages of a phase two clinical trial. was the only viable drug in the pipeline. this is significant in that the company value was wrapped up in the success of the clinical phaseand its subsequent three trial. on the evening of june 22, 2017 collins received in email informing him that the drug had failed its clinical trial.
electronic records indicate his initial shock at having received the news. was anticipated to hold billions of dollars in value would now be the cause of significant when it lost for innate and its investors, many of whom stared -- shared a personal relationship with congressman collins. while he was bound to keep this information confidential until the results were released four days later, we alleged that he did not. the indictment charges that he be immediately -- he immediately started informing those he had brought into the form. this set off a ripple effect where many were notified. most of them quickly sold their shares. the stock price plummeted 92% on the first trading day following the public announcement to get the conspirators had saved -- public announcement.
himself, having been prohibited from selling his shares for various reasons, did not avoid a financial loss. despite the fact, his actions brought him face-to-face with federal agents who had become aware of the crime that had been committed. when questioned by law enforcement about the alleged dealings, commerce and collins, his son cameron, cameron's fiancee's father lied plain and simple. today they are charged with insider trading and lying to federal law enforcement agents. collins may have thought that giving his family and friends a heads up about nonpublic information would benefit them in the long run, here is a better inside tip who think that they can play by a different set of rules. access to this information carries with it significant responsibility, especially for those in society who hold a position of trust. act honorably and in accordance
with the law. do not lie to special agents of the fbi. to jeff and your team of prosecutors. your work has been exceptional. i would like to thank stephanie and steve for your work. to those at our white-collar branch and investigators, i want to extend my personal appreciation. some are standing in the back in the shadows. your work has been exceptional. it you do in the community matters and makes a difference. thank you. >> i would like to invite to the podium, if the dust stephanie. -- stephanie. >> good afternoon. said, i am codirector of the sec division of enforcement. before i began my remarks i would also like to think jeff
berman and his prosecutors -- thank jeff berman and his prosecutors. today the ftc filed charges against congressman christopher collins, his son cameron collins and three others, alleging that they engaged in insider trading at of the announcement of negative drug trial results in june 2017. the complaint alleged that christopher collins learned of the negative news in his capacity as a member of the board of directors and quickly tipped cameron collins, who held stock. position in the in addition to cameron collins selling nearly 1.4 million of his own shares him he is alleged to have tipped his girlfriend, her mother and her father. thefcc further alleges that
fiancee's father, after trading his account further tipped his sibling and a friend. the complaints week discouragement of the ill-gotten gains, interest, penalties and permanent injunctions. they also seek an order barring christopher collins from serving as a director or officer of a public company. it is a privilege that comes with responsibilities. christopher collins is alleged to have abused this privilege and breached his responsibilities by engaging in illegal insider trading. lauren and dorothy both avoided losses by selling all of their shares in advance of the company's negative announcement and have agreed to settle the charges against them i consenting to injunctions discouraging their ill-gotten gains and paying civil penalties. lauren has also agreed to be suspended from practicing before
the commission as an accountant for at least five years. should not serve in the role of gatekeeper in our security markets. the settlements are subject to court approval. let me turn things over to stephen for some additional remarks. thank you. i would like to commend the excellent work of the staff members who handled this investigation and who will handle the litigation going forward. mccloskey,, patrick melissa armstrong. the insider trading enforcement program is a great success. have successfully detected and pursued insider trading schemes of all shapes and rises. -- sizes. by a singlepetrated
faithless insider. in the past five years alone, ,hanks to the staff's hard work developing expertise and its use of highly effective analytical tools, the fcc has filed more against trading cases more than 415 individuals. today's case is another example of the dedication and know-how. is ae heart of this action chain that extends from christopher collins to his son cameron collins to members of family and beyond. it specialized group within the division of enforcement uncovered suspicious trading by cameron collins. they did not stop there. they identified well-timed traits by people close to him, including his girlfriend, her mother, her father and her father's relatives and friends.
in addition to finding the trading at the core of this action, the staff who worked on this matter, working alongside andtalented prosecutors dedicated women of the fbi -- men and women of the fbi. the record consists of emails and text messages, cell phone records, trading data, communications including recorded calls with brokerage firms, i.t. logon information. it reflects frantic efforts to theey information to sell shares before the company's negative news announcement. as alleged in our complaints, defendant i counted over half of the entire trading volume on the first trading day after they got the news. cameron collins himself accounted for more than half of the shares sold on the next
trading day. insider trading is not just legal -- illegal, it is corrosive. it threatens consumer confidence and the integrity of our market. for our capital markets to retain their place as the envy of the world, law enforcement colleagues must be vigilant in policing against this misconduct. those who would engage in this behavior should know that we will continue to devote our resources, expertise and energy to finding them and holding them accountable. thank you. >> who will take your questions. [indiscernible] there is no allegation of a wiretap in this case. with respect to the details of the evidence that are not
contained in the indictment, doj policy restricts me. i will not get into the trial. [indiscernible] aspect of thisan indictment. [indiscernible] >> the indictment alleges that on the evening of june 22, 2017, when congressman collins via ind the information email from the ceo of innate, he was at the congressional picnic. that herom that picnic
tried to reach his son, six attempts in five minutes. on the seventh attempt he got through to his son and it is alleged that he relayed the results of that drug test so that his son could trade on that information. that was all done as alleged in the indictment at the congressional picnic. [indiscernible] >> the indictment does not specify the phone that he used. i do not think i am allowed outside the quarters of the indictment. are any of the co-conspirators cooperating with the trial? >> i have no comment on that.
>> was the referral from the congressional ethics office? >> i will not get into the matter of how this was referred to our office. >> there was the indication that his son -- how you go about proving that? thate indictment alleges the congressmen conveyed illegal inside information, anticipating that his son was going to trade on that information. i cannot get into the evidence at trial right now. >> the are about three months away from congressional elections. does your office have any concerns about this indictment now?
>> politics does not enter into our decision-making on charging a case. we bring a case when a case is ready to be brought. that being said, we are cognizant of the concerns surrounding an election. here we are, months away from the election and those concerns do not apply. [indiscernible] it is premature to discuss those matters. [indiscernible] >> i have no comment on that. the fcc has their investigation
they are conducting. we are conducting a criminal investigation with a different standard of proof. i'm not getting into the various factors like going to our direction of whether to charge or not charge someone. they are different investigations. [indiscernible] >> we have not. inc. you. -- thank you. >> after insider trading charges were filed against representative chris collins by officials, he spoke to reporters, denying the charges.